Gambling on a Gambling Employee

I manage a team of traders at a Wall Street firm, and one of my star employees recently came to me to confess he was in serious financial trouble because of gambling debt and asked if he might get a large advance on his salary to get him out of the hole.Our trading floor has a reputation for gambling, which the leadership does not discourage because we need aggressive traders willing to take risks. I myself have been in some card games with the employee in question.We have many programs to help employees with alcohol and substance abuse, but gambling is unchartered territory. I want to help him because he brings big returns for the company, but I worry that I will be setting a dangerous precedent where the company will be expected to cover employees for their personal mistakes. At the same time, I worry that he's just going to gamble this money to get ahead. Where's the line?
There are few fields where gambling is more necessary -- and more dangerous -- than Wall Street trading. It's been romanticized and vilified (see Michael Lewis' 1989 book, "Liar's Poker," for a nice insight on Wall Street gambling, guts and greed). But ultimately, it's part of the game. You need employees who are willing to risk money to make money; at the same time, you need employees who know a calculated risk from a reckless one.

Your bind is fascinating: you have an employee who takes good risks at work and seemingly poor risks in his personal life. But how do you mend the two without squashing the killer instinct he needs in his day job? And how do you avoid setting a precedent for condoning such behavior?

This is a situation where a good manager is essential, because your actions need to be based on how well you know your employee. From the little information you've supplied, I gather that this is an employee you value and trust when it comes to his on-the-job performance. This is a good sign. But now it's time for you to evaluate how much you know and trust him in his personal actions, because that's what you're betting on here.

Reckless gambling is an illness that breeds liars. Mostly, they lie to themselves. You need to gauge how honest he is being about his problem, and what exactly he's going to do with this advance. If you think he's going to do the right thing, which is to use that money to settle his debts and seek help for his problem (by the way, in your industry, I think your company is long overdue for adding gambling counseling to its list of addiction treatments), then you can consider betting on him. Choosing this option has the upshot of making him a better employee because you'll help remove a huge stress from his mind. But this is for you to decide: as a trader, you know a safe bet from a risky bet.

If you fear this money will be used as a Band-Aid and the cycle will continue, you can't add to the problem.

Should you decide to help your employee with his debt -- either way, you should help him with his problem with counseling from both professionals and yourself -- you need to cover your company. Draw up contracts that stipulate where the money can go and what he needs to do in return (i.e. counseling and treatment). Don't put you or your company in any sort of legal risk. And if it's at all possible, this is a matter best handled privately, to keep scorn from him and precedent from seeping around the office.

Good employees make good companies. It sounds like this guy is a very good employee, who's made some poor choices in his personal situation. If you think he can bounce back and continue taking good risks for your company while eliminating poor risks in his personal life, then he might be worth a gamble. But again, this is for you, as a manager and veteran risk-taker, to judge for yourself. It's time for you to look at your cards and decide if you want to ante or you want to fold.

Have a workplace-ethics dilemma? Ask it here, or email wherestheline@gmail.com

William Baker is a freelance writer living in Cambridge, MA. His work has appeared in Popular Science, the Boston Globe Magazine, the New York Daily News, Boston Magazine, The Weekly Dig and a bunch of other places (including Field & Stream, though he doesn't hunt and can't really fish). He is a regular contributor to the Boston Globe, where he writes the weekly column, "Meeting the Minds." He holds a master's degree from the Columbia University Graduate School of Journalism, and is at work on his first book.